Dear Mr. President, Why is it a Good Thing if a 10-Year Treasury Note is Worth Less Than a Bag of Dirt?

Economists don’t think Trump grasps that negative rates are a sign of economic weakness

by Greg Robb
Market Watch

President Donald Trump’s demand on Wednesday that the Federal Reserve slash its benchmark interest rate “to zero or even negative” is misguided, economists say, because rates that low would be a sign of weak economic conditions.

“Trump is confused. European rates are low because Europe is in trouble,” said Robert Brusca, chief economist at FAO Economics.

Carl Weinberg, chief economist at High Frequency Economics, noted that when a 10-year government note has negative interest rates, it is worth less than “a bag of dirt stored in your basement.”

Negative bond yields is a “red flag” that money has lost its value, he said. The risk is it may trigger “feckless spending”

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